Appreciate in real terms against foreign currencies

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Reference no: EM131591712

It is often asserted that exporters suffer when their home currencies appreciate in real terms against foreign currencies. This exporter "experience" stems from the fact that, ceteris paribus

A. the price of home goods relative to foreign goods rises when the home currency appreciates.

B. the price of home goods relative to foreign goods falls when the home currency appreciates.

C. a real appreciation of the home currency causes home goods to become relatively cheaper than foreign goods.

D. a real appreciation of the home currency forces exporters to reduce prices

E. B and C are both correct.

Reference no: EM131591712

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